The move mirrors that in the banking sector, except that asset managers will not be offered the same flexibility to increase the compensation mix with shareholder agreement.
Jon Terry, partner in PricewaterhouseCoopers’s reward team, said: “Asset managers will be concerned that ECON is suggesting a definition of those individuals who would be subject to the prescriptive rules which is far more explicit than those for banking or the alternative sector. If passed unchanged, this would significantly increase the number of people hit by the rules across senior management and the front, middle and back office.
“There is a long way to go to finalise any remuneration provisions and the industry needs to make a strong and persuasive case to significantly water down these proposals or risk being stuck with onerous and restrictive rules.”
Speaking of the EU-wide implications of the proposals, Stephen Cahill, head of compensation and benefits at Deloitte, said: “Changes to pay structures could create unwelcome complexity for asset managers in the EU. The cap on variable remuneration included in both the Ucits rules and CRD4, is likely to lead to increases in salary levels across the financial services sector and will increase fixed costs at a time when firms are looking to keep them down.”
